that. having debated a few times, i would say that the challenge is to answer the question, to engage with your opponent, and james is exactly right. people want to see a little battle, but to never forget as michelle obama said very well. the people you are talking to are not this thin that room. they are the people are you talking to. >> is that the kind of tough love speech you would give before they go out? by the way, you made me really nervous. i'm now nervous based on your speech. >> it's nerve-wracking, and i'll tell you one thing. obamas are not thinking about their anniversary right now. i can guarantee you that. last thing on their mind. >> that's why we do this primitive thing. we put them in the arena and make them go at each other this is a contest that could be a thousand years old. this is the land of opportunity.

this is what's next. that's why reagan was successful, fdr was successful. we don't want a leader who doesn't know where we are all going. >> absolutely. >> obamas went 2 1/2 hours, and it was a senate race. >> or more. >> no commercial breaks. debate is an hour and a half. our coverage continues afterward. let's go to candy in the debate hall. wolf, to you. >> anderson, thanks very much. i want to remind our viewers, at the bottom of the screen, squiggly lines, we have a focus group of undecided colorado voters, they are watching, what they like in the debate, don't like in the debate. a lot of squiggly lines, you will see how they are reacting. the only place you will see that kind of undecided voter react. we're standing by, jim lehrer is the moderator, getting ready to ask the first question as a result of a flip of a coin, the president of the united states will get the first answer and the last word will go to mitt romney. here is jim lehrer.

>> good evening at the magnus arena at the university of denver in denver, colorado. i'm jim lehrer of the pbs "news hour," and i welcome you to the first of the 2012 presidential debates between president barack obama, democratic nominee, and former massachusetts governor, mitt romney, republican nominee. the debates are sponsored by the commission on presidential debates. tonight's 90 minutes will be about domestic issues and will follow a format designed by the commission. there will be six roughly 15-minute segments with two-minute answers for the first question, then open discussion for the remainder of each segment. thousands of people offered suggestions on segment subjects or questions, via the internet and other means, but i made the

final selections, and for the record, they were not submitted for approval to the commission or the candidates. the segments as i announced in advance will be three on the economy, and one each on health care, the role of government, and governing. with an emphasis through out on differences, specifics, and choices. both candidates will also have two-minute closing statements. the audience here in the hall has promised to remain silent. no cheers, applause, boos, hisses, among other noisy, distracting things, so we may all concentrate on what the candidates have to say. there is a noise exception right now, though, as we welcome president obama. and governor romney. [ applause ]

>> jim. >> gentlemen, welcome to you both. let's start with the economy. segment one, and let's begin with jobs. what are the major differences between the two of you about how you would go about creating new jobs? have you two minutes. each of you have two minutes to start. a coin toss determined, mr. president, you go first. >> thank you very much, jim, for this opportunity. i want to thank governor romney and the university of denver for your hospitality, a lot of points i want to make tonight, but the most important one is that 20 years ago, became the

luckiest man on earth because michelle obama agreed to marry me. i want to wish you happy anniversary, and a year from now, we won't celebrate it in front of 40 million people. four years ago, we went through the worst financial crisis since the great depression. millions of jobs were lost, the auto industry was on the brink of collapse the financial system had frozen up, and because of theo resilience and determinatin of the american people, we've begun to fight our way back. over the last 30 months, we've seen 5 million jobs in the private sector created. the auto industry has come roaring back and housing has begun to rise. but we all know that we still have a lot of work to do. and so the question here tonight is not where we've been, but where we're going. governor romney has a perspective that says if we cut

taxes, skewed towards the wealthy and roll back regulation, we'll be better off. i have a different view. i think we have to invest in education and training. i think it's important for us to develop new sources of energy here in america. that we change our tax code to make sure that we're helping small businesses and companies that are investing in the united states. that we take some of the money that we're saving as we wind down two wars, to rebuild america. and that we reduce our deficit in a balanced way that allows us to make critical investments. now, ultimately it will be up to the voters, to you, which path we should take. are we going to double down on the top down economic policies that helped get us into this mess? or do we embrace a new economic patriotism, that says america does best when the middle class does best? i'm looking forward to having that debate. >> governor romney, two minutes. >> thank you, jim. an honor to be with you and pleased to be with the president.

i'm pleased to be at the university of denver, i appreciate the welcome and the presidential commission on these debates and congratulations to you, mr. president, on your anniversary. i'm sure ythis is the most romantic place you could imagine, here with me. this obviously is a tender topic. i've had the occasion of meeting people across the country. i was in dayton, ohio and a woman grabbed my arm and said i've been out of work since may. can you help me? and yesterday was at a rally in denver and a woman came up to her with a baby in her arms and said, ann, my husband has had four jobs in three years, part-time jobs, lost his most recent job and we've now just lost our home. can you help us? the answer is, yes, we can help, but it's going to take a different path. not the one we've been on, not the one the president describes as a top-down, cut taxes for the rich. that's not what i'm going to do. my plan has five basic parts.

get us north american energy independent which creates about 4 million jobs. number two, open up more trade, particularly in latin america. crack down on china, if and when they cheat. number three, make sure our people have the skills they need to succeed and the best skills skoolz in the world. far away from that now. and number four, get to us a balanced budget. number five, champion small business, it's small business that creates the jobs in america, and over the last four years, small business people have decided that america may not be the place to open a new business. because new business startups are down to a 30-year low. i know what it takes to get small business growing again. to hire people. i'm concerned that the path we're on has just been unsuccessful. the president has a view very similar to the view he had when he ran four years ago, that a bigger government, spending more, taxing more, regulating more, if you will trickle down government would work. that's not the right answer for america. i'll restore the vitality that gets america working again.

thank you. >> mr. president, please respond directly to what the governor just said about trickle down. his trickle down approach. he said yours is. >> let me talk specifically about what i think we need to do. first, we need to improve our education system and we've made enormous progress drawing on ideas from democrats and republicans that are already starting to show gains in some of the toughest to deal with schools. we have a program called race to the top that has prompted reforms in 46 states around the country. raising standards, improving how we train teachers, and i want to hire another 100,000 new math and science teachers and create 2 million more slots in our community colleges so people can get trained for the jobs that are out there right now. and i want to make sure we keep tuition low for our young people. when it comes to our tax code,

governor romney and i both agree our corporate tax rate is too high, i want to lower it, particularly for manufacturing, taking it down to 25%, but i also want to close those loopholes that are giving incentives for companies that are shipping jobs overseas, i want to provide tax breaks for companies that are here in the united states, on energy, governor romney and i, we both agree we have to boost american energy production and oil and natural gas production are higher than they've been in years, but i also believe that we have to look at the energy sources of the future like wind, solar, biofeels, and make those investments, so all of this is possible. now, in order for to us do it, we have to close our deficit, and one of the things we've been discussing tonight, how do we deal with our tax code and make sure we are reducing spending in a responsible way and how do we have enough revenue in those investments? this is a difference, because

governor romney's central economic plan calls for a $5 trillion tax cut in addition to $1 trillion extension of the tax cuts, and military tax cuts. how do we pay for that, reduce the deficit, without dumping costs on to middle class americans a central question this campaign. >> both of you have spoken about a lot of different things, we'll try to get through them as specific a way as we possibly can. governor romney, do you have a question you would like to ask the question directly about something he just said? >> sure, i would like to clear up the record and go through piece by piece. first of all, i don't have a $35 trillion tax cut. i don't have a tax cut of the you scale you're talking about. i think we ought to provide tax relief to people in the middle class. but i won't reduce the share of tax paid by high-income people.

the people who are having a hard time right now are middle income americans, under the presses's policies, middle income americans have been buried, have been crushed. middle income americans have seen income come down by $4,300 this is a tax in and of itself. i'll call it the economic tax. it's been crushing. the same time, gasoline prices have doubled under the president, electric rates are up, food prices are up. health care costs have gone up by $2,500 a family. middle income families are being crushed, and the question is, how to get them going again. energy, trade, the right kind of training programs, balancing our budget and helping small business. those are the cornerstones of my plan, but the president mentioned a couple other ideas, and i'll note, first education. i agree, education is key, particularly the future of our economy, but our training programs right now, 47 of them, housed in the federal government, reporting to eight different agencies, overhead is

overwhelming, we have to get dollars back to the states and go to the workers so they can create their own pathways to create jobs that will really help them. the second area, taxation, we ought to bring the tax rates down. i a i do for corporates and individuals. but i also lower deductions, credits, exemptions, so you take in the same money for growth. the third area, energy. production of oil and gas in the u.s. is up. but not due to his policies. in spite of his policies. mr. president, all of the increase in natural gas and oil has happened on private land. not on government land. on government land, your administration has cut the number of permits and licenses in half. if i'm president, i'll double them. and also get the oil from offshore and alaska, and i'll bring that pipeline in from canada, and by the way, i like

coal. i'm going to make sure we can continue to burn clean coal. people in the coal industry feel like it's getting crushed by your policies. i want to get america and north america energy independent so we can create those jobs, and finally with regard to the tax cut, look, i'm not looking to cut massive taxes and to reduce revenues going to the government. my number one principal is, there will be no tax cut that adds to the deficit. i want to underline that no tax cut that will add to the deficit. i want to reduce the burden being paid by middle income americans, and to do that, that also means i cannot reduce the burden paid by high-income americans. any language to the contrary is simply not accurate. >> mr. president. >> let's talk about taxes, because i think it's instructive. now, four years ago when i stood on the stage, i said that i would cut taxes for middle class families. and that's exactly what i did. we cut taxes for middle class

families by $3,600. and the reason is, because i believe we do best when the middle class is doing well. and by giving them those tax cuts, they had a little more money in their pocket. maybe they can buy a new car, certainly in a better position to weather the extraordinary recession we went through. they can buy a computer for their kid, going off to college. which means they are spending more money, businesses have more customers, make more profits and hire more workers, now, governor romney's proposal that he has been promoting for 18 months, calls for a $5 trillion tax cut on top of $2 trillion of additional spending for our military. and he is saying that he is going to pay for it by closing loopholes and deductions, the problem is, he's been asked over 100 times how you would close those deductions and loopholes and he hasn't been able to identify them. i had make an important point

here, jim. >> all right. >> when you add up all the loopholes and deductions that upper income individuals can -- are currently taking advantage of, take those all away, you don't come close to paying for $5 trillion in tax cuts and $2 trillion in additional military spending and that's why independent studies looking at this said the only way to meet governor romney's pledge of not reducing the deficit or not adding to the deficit is by burdening middle class families, the average middle class family with children would pay $2,000 more. now, that's not my analysis, that's the analysis of economists who have looked at this. and that kind of top-down economics where folks at the top are doing well and the average person making $3 million is getting a $250,000 tax break while middle class families are burdened further, that's not a

recipe for growth. >> let's just stay on taxes for a moment. what is the difference? >> virtually everything he said about my tax plan is inaccurate. if the tax plan he described were a tax plan i was asked to support, i would say absolutely not. i'm not looking for a $5 trillion tax cut. what i've said is i won't put in place a tax cut that adds to the deficit. that's part one. no economist can say mitt romney's plan adds $5 trillion. if i say i had not add to the deficit with my tax plan. number two, i won't reduce the share paid by high-income individuals. i know it's a popular thing to say with a lot of people, and it's not the case. look, i have five boys, i'm used to people saying something that isn't always true and keep on saying it hoping ultimately i will believe it. that is not the case. i had not reduce the taxes paid by high-income americans, and number three, i had not under any circumstances raise taxes on middle income families. i will lower taxes on middle

income faemdmilies. you cite a study, there are six other studies that look at that study and say it's completely wrong. i saw a study that says you will raise taxes by $3 to $4 million on middle income families. all these studies down there i want to bring the rates down at the same time we lower deductions and exemptions and credits and so forth so keep getting the revenue we need. why lower the rates? the reason is, because small business pays that individual rate. 54% of america's workers work in businesses that are taxed not at the corporate tax rate, but at the individual tax rate. and if we lower that rate, they will be able to hire more people. for me, this is about jobs. this is about getting jobs for the american people. >> yeah, do you challenge what the governor just said about his own plan? >> well, for 18 months he's been run owning this tax plan, and

now five weeks before the electi election, he says his big bold idea is never mind. and the fact is that if you are lowering the rates the way you describe, governor, then it is not possible to come up with enough deductions and loopholes that only effect high-income individuals to avoid raising the deficit or burdening the middle class. it's math, arithmetic. we do share encouraging business growth. at the same time my plan has lowered taxes for 98% of families, i also lowered taxes for small businesses 18 times, and what i want to do, is continue the tax rates, the tax cuts that we put into place, for small businesses and families. but i have said for incomes over

$250,000 per year, we should go back to the rates when bill clint or was president, when we went from deficit to surplus and created a whole lot of millionaires to boot. the reason this is important is because by doing that, we can not only reduce the deficit, not only encourage job growth through small businesses but make the investments necessary in education and energy. and we do have a difference when it comes to division division s of small businesses. top 3% of job creators would be burdened according to governor romney. but there are a whole bunch of millionaires and billionaires are small business. donald trump is a small business. donald trump doesn't like to

think of himself as small anything. that kind of approach i believe will not grow our economy, because the only way to pay for it without either burdening the middle class or blowing up our deficit is to make drastic cuts in things like education, making sure that we are continuing to invest in basic science and research, all of the things helping america grow and that would be a mistake. >> all right. >> jim, let me come back on the point. >> for the record -- excuse me. just so everybody understands, we are way over our first 15 minutes. great, no problem. >> that's good. >> if you don't have a problem, i don't have a problem, we're still on the economy, we'll come back to taxes, i want to move on to the deficit and a lot of other things too. go ahead, sir. >> president -- mr. president, are you absolutely right with regard to 97% of businesses are not taxed at 35% tax rate, but

at a lower tax rate. the businesses in the last 3% of businesses happen to employ half -- half of all people that work in all small businesses. they employ one-quarter of all workers in america, and you want to take their tax rate from 35% to 40%. i talked to a guy with a very small business, electronics business in st. louis. he has four employees. he said he and his son calculated how much they pay in taxes, federal income tax, payroll tax, state sales tax, state property tax, gasoline tax, it added up to well over 50% of what they earned and your plan is to take the tax rate on successful small businesses from 35% to 40%. the national federation of independent businesses says that will cost 700,000 jobs. i don't want to cost jobs. my priority is jobs. and so what i do, i bring down the tax rates, lower deductions

and exemptions, the same idea by bowles-simpson, get the rate down to create more jobs. nothing better to create a balanced budget than having more people working, earning more money, paying more taxes, that's the most effective and efficient way to get the budget balanced. >> jim, you may want to move on to another topic. i would say this to the american people. if you believe we can cut taxes by $5 trillion and add $2 trillion of additional spending to the military that is not asking for, $7 trillion, to give you a sense, over ten years, that's more than our entire defense budget, and you think that by closing loopholes and deductions for the well to do, somehow you will not end up picking up the tab, then governor romney's plan may work for you. but i think math, common sense, and our history shows that's not

a recipe for job growth. look, we've tried this. we've tried both approaches. the approach that governor romney is talking about is the same sales pitch made in 2001 and 2003. and we ended up with the slowest job growth in 50 years. we ended up moving from surplus to deficits, and it all culminated in the worst financial crisis since the great depression. bill clinton coined the approach i'm talking about. created 23 million new jobs, went from deficit to surplus, and businesses did very well. so in some ways we've got some data on which approach is more likely to create jobs and opportunity for americans, and i believe that the economy works best when middle class families are getting tax breaks so they've got money in their pockets, and those of us who have done extraordinarily well because of this magnificent country that question live in,

that we can afford to do a little more to make sure we're not blowing up the deficit. >> the president began this segment, so i think i get the last word. so i'm going to take it. >> you'll get the first word in the next segment. >> he gets the first word in this segment, i get the last word i hope. >> that's okay. >> i'm not in favor of a $5 trillion tax cut. that's not my plan. i'm not putting in place any tax cut that will add to the deficit. that's point one. you can keep referring to a $5 trillion tax cut, but that's not my plan. >> okay. >> let's look at history. my plan is not like anything that's been tried before. i want to bring down rates, but also bring down deductions, exemptions and credits at the same time, so the revenue stays in, but bring down rates to get more people working. my priority is putting people back to work in america. they are suffering in this country. and we talk about evidence, look at the evidence of the last four years. it's absolutely extraordinary. we've got 23 million people out

of work. when the president took office, 23 mi 32 million people on food stamps, now 47 million on food stamps. status quo will not cut it for american people struggling today. >> let's talk -- we're still on the economy. this is theoretically now, a second segment, still on the economy. and specifically on what to do about the federal deficit. the federal debt, and the question, you each have two minutes on this, and, governor romney, you go first, because president went first on segment one. and the question is this. what are the differences between the two of you as to how you would go about tackling the deficit problem in the country? >> good. i'm glad you raised that. u.s. a critical issue. it's not just an economic issue,

i think u.s. a moral issue. it's frankly not moral for my generation to keep spending massively more than we take in, knowing burdens will be passed on to the next generation and paying interest and principal all their lives. and the amount of debt we're adding at a trillion a year is not moral. how do we deal with it? mathematically, three ways you can cut a deficit. one is to raise taxes, two is to cut spending and number three is to grow the economy. more people work in a growing economy, paying taxes and get the job done that way. the president would prefer to raising taxes. i understand. the problem with raising taxes, it slows down the rate of growth, and you can never quite get the job done. i want to encourage economic growth and cut spending. what would i cut from spending? i will eliminate all programs by this test if they don't pass it. is the program so critical it's

worth borrowing money from china to keep? obama care is on that list. i'm sorry, mr. president. i will stop the subsidy to pbs. i like pbs. i love big bird, like you too. but i'm not going to keep spending money to borrow money to pay for. that's number one. number two, i'll take programs that are currently good programs but could be run more efficiently at the state level and send them the state. number three, i'll make government more efficient, combine some agencies and departments, cutbacks will be done through attrition by the way. this is the approach we have to take to get america to a balanced budget. the president said he would cut the deficit in half. unfortunately, he doubled it. trillion dollar deficits for the last four years. the president has put it in place as much public debt, almost as much debt held by the public as all prior presidents combined. >> mr. president, two minutes. >> when i walked into the oval

office, i had more than a trillion dollar deficit greeting me. and we know where it came from. two wars that were paid for on a credit card. two tax cuts that were not paid for. and a whole bunch of programs not paid for and then a massive economic crisis. and despite that, what we've said is, yes, we had to take initial emergency measures to make sure we didn't slip into a great depression, but we've also said, let's make sure we are cutting out those things that are not helping us grow. so 77 government programs from aircrafts that the air force had ordered but weren't working very well. 18 government -- 18 government programs for education that were well intentioned, not helping kids learn. we went after medical fraud in medicare, medicaid, very aggressively, more aggressively than ever before, and have saved

tens of billions. 50 billion of waste taken out of the system. i worked with democrats and republicans to cut a trillion dollars out of the discretionary domestic budget. largest cut in the discretionary domestic budget since dwight eisenhower. we know we have to do more. i put forward a specific $4 trillion deficit reduction plan. on a website, you can look at the numbers. what cuts we make, and what revenue we raise. and the way we do it, $2.50 for every cut, we ask for $1 additional revenue, paid for by asking those who have done very well in this country to contribute more to reduce the deficit. the bowles-simpson suggested that's how we do it. in a balanced way with some revenue and some spending cuts.

and this is a major difference that governor romney and i have. let me fin their point. you're looking for contrasts. you know, when governor romney stood on a stage with other republican candidates for the nomination, and he was asked, would you take $10 of spending cuts for just $1 of revenue? and he said no. now, if you take such an unbalanced approach, then that means you are going to be gutting our investments in schools and education. it means that governor romney talked about medicaid and how we could send it back to the states, but effectively, this means a 30% cut in the primary program we held for seniors in nursing homes, for kids with disabilities, and that's not a right strategy for us to move forward. >> mr. president, way over the two minutes. >> governor, what about

simpson-bowles? >> the president should have grabbed that. >> do you support it? >> i have my own plan. i think the president should have grabbed it. if you have some adjustments, make it, take it to congress, go for it. >> that's what we've done. $4 trillion plan. >> have you been president for four years you said would you cut the deficit in half. and we'll have a trillion dollar deficit each of the next four years. if you are re-elected we'll get to a trillion dollar deficit. you said before you would cut it in half. $4 trillion to get closer to a balanced budget, yet we have trillion dollar deficits every year. why don't i want to raise taxes? why don't i want to raise taxes on people? and actually you said it. back in 2010, you said, look, i'm going to extend the tax policies we have. i won't raise taxes on anyone.

when we're in a recession, you shouldn't raise taxed on anyone. the economy is still growing slow. in fact, much more slowly now than when you made that statement. if you believe the same thing, you don't want to raise taxes on people. and the reality is, it's not just wealthy people, not just donald trump are you taxing. it's all the businesses that employ one quarter of the workers in america, that are taxes as individuals. you raise taxes and kill jobs, that's why the national federation of independent businesses said your plan will kill 700,000 jobs. i don't want to kill jobs in this environment. i want to make one more point. >> let mihim answer the tax thi for a moment. >> we've had this discussion before. >> about the judged nidea in or reduce the deficit there has to be revenue in addition to cuts. >> mr. romney has rule out

revenue. >> look, the revenue i get is more people working, getting higher pay, paying more taxes. that's how we get growth and balance the budget. the idea of taxing people more, putting more people out of work, you will never get there, you never balance the budget by raising taxes. spain spends 42% of their total economy on government. we're now spending 42% on our economy to government. i don't want to go down the path of spain. i want to put more americans to work. >> mr. president, in order to get the job done, it is going to be balanced? >> if we're serious, we have to take a balanced, responsible approach. by the way, this is not just when it comes to individual taxes, let's talk about corporate taxes. now, i have identified areas where we can right away make a change that i believe would actually help the economy. the oil industry gets 4 billion

a year in corporate welfare. basically, deductions that those small businesses that governor romney refers to, they don't get. now, does anybody think that exxonmobil needs some extra money, when they are making money every time you go to the pump? why wouldn't we want to eliminate that? why wouldn't we eliminate tax cuts for corporate jets? if you have a corporate jet, you can probably afford to pay full freight, not get a special break. when it comes to corporate taxes, governor romney said he wants to in a revenue neutral way close loopholes, deductions, he hasn't identified which ones they are, but thereby bring down the corporate rate. well, i want to do the same thing, but i've identified how we can do that, and part of the way to do it it is to not give tax breaks to companies that are shipping jobs overseas. right now, you can actually take

a deduction for moving a plant overseas. most americans would say that doesn't make sense and all that raise revenue. if we take a balanced approach, what that then allows us to do is also help young people the way we already have during my administration, make sure they can afford to go to college. it means the teacher i met in las vegas, a wonderful young lady who described to me, she has 42 kids in her class. the first two weeks, she has some of them sitting on the floor until they get reassigned. they are using textbooks that are ten years old. that is not a recipe for growth, not how america was built. budgets reflect choices. we have to make decisions, if we're asking for no revenue, that means we've got to get rid of a whole bunch of stuff and the magnitude of the tax cuts you're talking about, governor, would end up resulting in severe

hardship for people, but more importantly would not help us grow. as i indicated before, when you talk about shifting medicaid to states, we're talking about potentially a 30 -- a 30% cut in medicaid over time. now, that may not seem like a big deal when it is just -- numbers on a sheet of paper, and there is a family with an autistic kid and depending on medica medicaid, that's a big problem, and governors are created, no doubt about it but not creative enough to make up 30% of revenue on something like medicaid. some people end up not getting help. >> jim, we've gone on a lot of topic there, so it will take a minute to go to medicaid to schools to oil companies to tax breaks to companies going overseas. the tax break for oil companies $2.8 billion a year, and it's an accounting treatment that's been

in place for 100 years. >> time to end it. >> and in one year, you provided $90 billion in breaks to the green energy world. now, i like green energy as well. but that's about 50 years' worth of what oil and gas receives, and you say exxonmobil, this goes largely to drilling operators and so forth. if we get the tax rate from 35% to 25%, that $2.8 billion is on the table. of course it's on the table. probably won't survive if you get the rate to 25%. don't forget, you put $9 0 billion, like 50 years worth of breaks to solar and win to solyndra, fiskar and t

northwestetendrel. you don't just pick winners and losers, you pick the losers. and the idea that you get a break for shipping jobs overseas is simply not the case. what we have right now, i would like to bring money from overseas back to this country. and medicaid to states, i'm not sure where this came in. except this. i would like to take medicaid dollars to go to states and say you will get what you got last year, plus inflation, plus 1%, and then you will manage your care for your poor in the way you think best. and i remember as a governor when this idea was floated by tommy thompson, the governors, republican and democrats, said please let us do that. we can care for our own poor in so much better and more effective way, than have the government tell us how to care for our poor. one of the magnificent things of this country, the states are the

laboratory for democracy. don't let the federal government tell them what kind of training programs they have to have. let states do this. if a state gets in trouble, we can step in, see if we can fin a way to help them. >> let's go. >> the right approach is one which relies on the brilliance of the states, not the federal government. >> still going on to the economy, another part of it. all right. this is segment three. the economy. entitlements. first answer goes to you, two minutes, mr. president. do you see a major difference between the two of you on social security? >> i suspect that on social security, we've got say somewhat similar position. social security is structurally sound it will have to be tweaked the way it was by president reagan and tip o'neill. i want to talk about the values behind social security and medicare and then talk about

medicare. that's the big driver of our deficits right now. my grandmother, some of you know, helped to raise me, and my grandparent did. my grandfather died a while back. my grandmother died three days before i was elected president. she was fiercely independent. only with a high school education, started as a secretary and ended up being vice president of a local bank. she ended up living alone by choice, and the reason she could be independent was because of social security and medicare. she had worked all her life, put in this money, and understood that there was a basic guarantee under which she could not go. that's the perspective i bring when i talk about what's called entitlements. the name implies some sort of dependency on the part of folk. these are folks that have worked hard, like my grandmother and millions are counting on this.

my approach is to say how do we strengthen the system over the long term? in medicare, what we did, we said we are going to have to bring down the costs if we are going to deal with long-term deficits. to do that, let's look where the money is going. $716 billion we were able to save from the medicare program by no longer overpaying insurance companies, by making sure that we weren't overpaying providers, and using that money, we were actually able to lower prescription drug costs for seniors by an average of $600 and able to make a significant dent in providing them the kind of preventative care that will save money throughout the system. so the way for us to deal with medicare in particular is lower health care costs. when it comes to social security, as i said, you don't need a major structural change to make sure social security is there for the future. >> followup, governor romney two

months on social security and entitlements. >> well, jim, our seniors depend on these programs and i know any time we talk about entitlements, people become concerned that something will happen to change their life for the worst. and the answer is neither the president nor i are proposing any changes for current retirees or near retirees to social security or medicare. so if you are 60 or around 60 or older, you don't need to listen any further. but for younger people, we need to talk about what changes will be occurring. i thought about one. i, in fact, was wrong, when i said the president isn't proposing any changes. on social security he is not. but on medicare, current retirees, cutting $716 million from the program, by not paying providers. just saying we'll reduce the rates are you going to get paid across the board. everybody will get a lower rate.

that's not just going after places with abuse, that's lowering the rates. some 15% of the hospitals and nursing homes won't take more medicare patients under that scenario. 50% of doctors said they won't take more medicare patients. we have 4 million people on medicare advantage that will lose medicare advantage because of the $716 billion in cuts. i can't understand how you can cut medicare $716 million for current recipients of medicare. you point out, we're putting some back, better prescription program. that's $1 for every $15 you've cut. they are smart enough to know that's not a good trade. i want to take that $716 million you've cut, put it back into medicare. we can include a prescription program. but the idea of cutting $716 million from medicare to be able to balance the additional cost of obama care is in my opinion a mistake. with regard to young people coming along, i have proposals

to make sure medicare and social security are there for them without question. >> mr. president. >> first of all, i think it's important for governor romney to present this plan that he says will only affect folks in the future. and the essence of the plan as you would turn medicare into a voucher program. it's called premium support, and u.s. a vou it's a voucher program. >> and you don't support that? >> i don't. >> and that's for younger people. >> if you are 54or 55, you might want to listen this will affect you. the idea, originally presented by kochm congressman ryan, your running mate. we would give a voucher to seniors and they could go out in the private marketplace and buy their own health insurance. the problem is, that because the voucher wouldn't necessarily keep up with health care

inflation, it was estimated that this would cost the average senior about $6,000 a year. now, in fairness, what governor romney said is he will maintain traditional medicare alongside it. what happened, those insurance companies are pretty clever at figuring out who are the younger and healthier seniors, recruit them, leaving the older and sicker seniors in medicare. and over time, what will happen, the traditional medicare system will collapse. and then what you've got is folks like my grandmother, at the mercy of the private insurance system, precisely at the time when they are most in need of decent health care. so i don't think vouchers are the right way to go, and this is not my -- not only my opinion. aarp thinks that the savings we obtained from medicare bolstered the system, lengthened the

medicare trust fund by eight years, benefits not affected at all. and ironically if you repeal obama care, and i've become fond of this terms, obama care. if you repeal it, what happens, those seniors will pay $600 more in prescription care, will have to pay copays for basic checkups that will keep them healthier and the primary beneficiary of that repeal are insurance companies that are estimated to gain billions of dollars back when they aren't making seniors any healthier, and i don't think that's the right approach when it comes to making sure that medicare is stronger over the long term. >> we'll talk about -- specifically about health care in a moment. do you support the voucher system, governor? >> what i support is no change for current retirees and near retirees to medicare and the president supports taking $716

million out of that program. that's number one. number two, for people coming aalong that are young. what i do to make sure we have medicare in place for them. is allow them to choose the current medicare program or a private plan, their choice. and they'll have at least two plans that will be entirely at no cost to them. they don't have to pay das additional money no, additional $6,000. they will have two plans. no money. and if the government can offer premium as low as private sector, they will be happy to get traditional medicare. i know my own view, i would rather have a private plan. i would rather to have an insurance company. if i don't like them, i can get rid of them and find a different insurance company. people make their own choice. the other thing to save medicare? the benefits high for those low income, but for higher income people, we have to lower some of the benefits.

make sure the program is there for the long term. that's the plan i come forth for the long term. it came not only for paul ryan, but also came from bill clinton's chief of staff this is an idea that's been around a long time. saying, hey, let's see if we can't get competition into the medicare world so people can get the choice of different plans at lower cost, better qualities. >> jim, if i can respond very quickly. first of all, every study has shown medicare has lower administrative costs than private insurance does, which is why seniors are generally pretty happy with it, and private insurance has to make a profit. nothing wrong, that's what they do. and so you have higher administrative costs, plus profit, on top of that. and if you are going to save any money through what governor romney is proposing, what has to happen, the money has to come

from somewhere. and when you move to a voucher system, you are putting seniors at the mercy of those insurance companies, and over time if traditional medicare has decayed or fallen apart, they are stuck. and this is the reason why aarp has said that your plan would weaken substantially and that's why they were supportive of the approach that we took. one last point i want to make. we do have to lower the cost of health care, not just in medicare and medicaid. but overall. >> that's a big topic. can we stay on medicare? can we finish? >> very quickly, before we leave the economy. >> let's get back to medicare. >> no, no. >> the government can provide the service at lower cost and without a profit. >> all right. >> if that's the case, ten it will always be the best product people can purchase. >> wait a minute, governor. >> my experience, the private sector is typically able to provide a better product at a

lower cost. >> can the two of you agree have a choice, a clear choice on the two of you on medicare? >> absolutely. >> absolutely. >> to finish quickly, briefly, on the economy. what is your view about the level of federal regulation on the economy right now? too much, and in your case, mr. president, should there be more? beginning with you, this is not a new two-minute segment. we're going to go for a few minutes and go to health care, ok? >> regulation is essential. you can't have a free market work if you don't have regulation. as a business person, i needed regulations. you couldn't have people opening up banks in their garage and making loans. i mean, you have to have regulations to have an economy work. every free economy has good regulations. at the same time, it could be become excessive. >> is it engs cessive now? >> in some places.

and out of date. in some legislation passed during the president's term, have you seen regulation become excessive and it's hurt the economy. let me give you an example. dodd frank passed and includes within it a number of provisions that i think has a number of consequences. banks too big to fail. this is the billinge ebiggest k york banks i have ever seen. 122 community and small banks have closed since dodd-frank. there is one example. >> you want to repeal dodd-frank? >> repeal and replace it. we're not getting rid of all regulation. there are some parts of dodd-frank that make all the sense in the world. you need transparency, you need to have leverage limits for -- >> here is the specific -- >> excuse me. >> let's talk about the big one. >> no, let's not. let's let him respond, let's let

him respond to dodd frank and what the governor said. >> i think this is a great example, the reason we have been in such an enormous economic crisis, was prompted by reckless behavior across the board. you have loan officers giving loans and mortgages that really shouldn't have been given, because the folks didn't qualify. people borrowing money to buy a house they couldn't afford. credit agencies stamping these as a-1 great investments when they weren't. but you also had banks making money, hanover fist, churning out products that the bankers themselves didn't even understand, in order to make big profits but knowing that it made the entire system vulnerable. what did we do? we stepped in, had the toughest reforms on wall street since the

1930s. banks, you have to raise capital requirements, you can't engage in risky behavior that is putting main street at risk. you have to have a living will so we know how you can fin things down to make a bad bet so we don't have other taxpayer bailouts, in the meantime, we had to make sure that the help we provided was paid back, every single dime, with interest. now, governor romney said he wants to repeal dodd-frank. and i appreciate and it appears we have some agreement that a marketplace to work has to have some regulation. but in the past, governor romney says he wants to repeal dodd-frank, roll it back. so the question is, does anybody out there think that the big problem we had is that there was too much oversight and regulation of wall street? because if you do, then governor romney is your candidate.

but that's not -- >> sorry, jim. that's not the facts. we have to have regulation on wall street. that's why i'd have regulation, but i wouldn't designate five banks too big and fail and give them a blank check. one of the unintended consequences of dodd-frank. it wasn't thought through properly. we need to get rid of it, regional and small banks are getting hurt. another regulation, we were giving mortgages to people who weren't qualified. exactly right. one of the reasons for the great financial calamity we had. and dodd-frank says we need qualified mortgages and if you give a mortgage that's not qualified, there are big penalties, except they never went on and defined what a qualified mortgage was. it's been two years. banks are reluctant to make loans, mornings, try and get a mortgage these days? ith hurt the housing market, because dodd frank didn't anticipate putting in place the

kinds of regulations you have to have. it's not the dodd frank always wrong with too much regulation, sometimes they didn't come through with clear regulation, i'll make sure we don't hurt the functioning of our marketplace. i want to get back good jobs. >> we have another clear difference between the two of you, let's move to health care, where i know there is a clear difference and that has to do with the affordable care act, obama care, and it's a two-minute new segment. that means two minutes each, you go first governor romney. you want to repealed? the affordable care act repea d repealed. why? >> i sure do. it comes in part from my experience. i was in new hampshire, a woman came to me and said, look, i can't afford insurance for myself or my son. i met a couple in appleton, wisconsin, and they said we're thinking of dropping insurance, we can't afford it.

and the number of small businesses i've gone to who are dropping insurance because they can't afford it the cost of health care is prohibitive and we have to deal with costs. unfortunately, when -- when you look at obama care, the congressional budget office says it will cost 2,500 per year more than that tra decisional experience. it's added to costs. the president said that by this year, he would have brought down the cost of insurance by $2,500 per family. instead, it's gone up by that amount. so it's expensive. expensive things hurt families, that's one reason i don't want it. second reason, it cut $716 million from medicare to pay it it. number three, it puts in place an un-elected board that will tell people ultimately what kind of treatment these can have. i don't like that idea. fourth, there was a survey done of small businesses across the country, said what's the effect

of obama care on hiring plans. 3/4 said it makes us less likely to hire people. i don't know how the president could come into office facing $23 million people out of work. an economic crisis at the kitchen table and energy and passion for two years fighting for obama care instead of fighting for jobs for the american people. it has killed jobs, and the best course for health care is do what we did in my state. craft a machine at tplan at the that fits the needs of the state and focus on getting costs down for people, rather than raise it for a $2,500 additional premium. >> mr. president, the argument against repeal? >> four years ago, i was traveling around having the same conversations governor romney is talking about, and it wasn't just that small businesses were seeing costs skyrocket and they couldn't get affordable coverage even if they wanted to provide

it to employees. it wasn't because this was the biggest driver of the federal deficit, but it was families, who were worried about going bankrupt if they got sick. millions of families, all across the country. preexisting condition. might not we able to get coverage at all if they did have coverage, insurance companies might impose an arbitrary limit. so as a consequence, paying premiums, somebody xwets really sick, lo and behold, they don't have enough money to pay the bills because the insurance companies say they've hit the limit. so we did work on this, alongside working on jobs, because this is part of making sure that middle class families are secure in this country. and let me tell you exactly what obama care did. number one, if you got health insurance, it doesn't mean a government takeover. you keep your own insurance. you keep your own doctor. but it says insurance companies can't jerk you around and can't

impose arbitrary lifetime limits. they have to keep your kid on insurance until they are 26 years old. and it says you will get rebates if insurance companies are spending more on administrative costs and profits than actual care. number two, if you don't have health insurance, we're essentially setting up a group plan that allows you to benefit from group rates typically 18% lower than if you are out there trying to get insurance on the individual market. now, the last point i would make, before -- >> two minutes is up, sir. >> no, i think -- i had five seconds before you interrupted me. the irony, we've seen this model work really well in massachusetts. because governor romney did a

good thing working with democrats in the state, to set up what is essentially the identical model and as a consequence, people are covered there. it hasn't destroyed jobs, and as a consequence, we now have a system in which we have the opportunity to start bringing down costs as opposed to leaving people out in the cold. >> five seconds went away a long time ago. all right, governor, tell the president directly why you think what he just said is wrong about obama care. >> well, i did with my first statement, but i'll go on. >> please elaborate. >> first of all, i like the way we did it in massachusetts. i like the fact that in my state we had republicans and democrats come together and work together. what you did instead, push through a plan without a single republican vote. as a matter of fact, when massachusetts did something quite extraordinary, elected a republican senator to stop obama

care, you pushed it through anyway. instead of bringing america together and having a discussion on this important topic, you pushed something through that you and harry reid and nancy pelosi thought was the best answer. what we did, we worked together. 2 0 00 legislators, only 2 vote against the plan. we didn't raise taxes, we didn't cut maid care. of course, we don't have medicare, by $716 million. we didn't have a board that told people what treatments they could receive. we didn't put people in a position where they will lose the insurance they had and wanted. right now, the cbo says up to 20 million people will lose their insurance and likewise, a study by mckenzie and company said 30%

are anticipating dropping them from coverage. for those reasons, for the tax, medicare, for this board, for people losing their insurance, this is why people don't want ebecama care, where republicans said do not do this. the bipartisan plan of the republicans was swept aside. i think this has to be done on a bipartisan basis and we have to have a president that can reach across the aisle and fashion legislation with input from both parties. >> governor romney said this has to be done with a bipartisan basis. this was a bipartisan idea, in fact, a republican idea. governor romney at the beginning said what we did in massachusetts could be a model for the nation, and i agree that the democratic legislators in massachusetts might have given some advice to congress on how to cooperate.

but the fact is, we use the same advisers, and it's the same plan. it -- when governor romney talks about this board, for example, un-elected board we've created. what this is, is a group of health care experts, doctors, et cetera, to figure out how can we reduce the cost of care in the system overall? because there are two ways of dealing with health care crisis. one is to simply leave a whole bunch of people uninsured and let them fend for themselves. to let businesses figure out how long they can continue to pay premiums until they finally give up and the workers are no longer getting sured and that's the trend line, or we can figure out how can we make the cost of care more effective, and there are ways of doing it. at cleveland clinic, one of the best health care systems in the world, they actually provide great care, cheaper than average. and the reason they do, is

because they do some smart things, they say if a patient is coming in, let's get all of the doctors together at once, do one test instead of having the patient runaround with ten tests. let's make sure we're providing preventative care to we're catching the on seth set of dia. let's pay on the basis of performance versus how many procedures they engaged in. this board identifies best practices and says let's use the purchasing power of medicare and medicaid to help to institutionalize all these good things that we do. and the fact of the matter is, that when obama care is fully implemented we'll be in a position to show that costs are goingory. the last two years, health care premiums have gone up, it's true, but they've gone up slower

than any time in the last 50 years. already beginning to see progress. in the meantime, folks with insurance, are you already getting a rebate. let me make one last point. governor romney says we should replace it. i'm going to repeal it. we should replace it with something. he hasn't described what we'll replace it with, other than saying we'll leave it to the states. some of the prescriptions he's offered like letting you buy insurance across state lines, no indication that will help someone with a preexisting condition be able to finally buy insurance. it's estimated by repealing obama care, you're looking at 50 million people losing health insurance at a time when it's vitally important. >> let's let the governor explain what you would do if obama care is repealed? >> well, actually it's -- it's a lengthy description, but number one, preexisting conditions are

covered under my plan. number two, young people able to stay on the family plan. already offered in the marketplace. you don't have to have the government mandate that for that to occur. let's come back on something the president and i agree on. the key task we have in health care is to get costs down, so it's more affordable for families, and a model for doing that, a board of people, at the government, an un-elected appointed board that will decide what treatments people will have. the government is not effective in bringing down the cost of almost anything. as a matter of fact, free people and free enterprises, trying to find ways to do things better are able to be more effective than bringing down the costs than the government ever will be. your example of the cleveland clinic is my case in point, along with several others i could describe. this is the private market, enterprises competing with each

other, learning how to do better and better jobs. i used to consult to hospitals and health care providers and i was astonished at the creativity and innovation that exists with american people. in order to bring the cost of health care down, we don't need a board of 15 people telling us what kind of treatments we should have. we instead need to put insurance plans, providers, hospitals, doctors, on target, such that they have an incentive that you say. performance pay for doing excellent job. inner mountain health care does it superbly well. cleveland clinic, others, but the right answer is not to have the federal government take over health care and start mandating to the providers across america, telling a patient and a doctor, what kind of treatment they can have. that's the wrong way to go. the private market and individual responsibility always work best. >> let me just point out, first of all, this board we're talking

about, can't make decisions about what treatments are given. that's explicitly prohibited in the law. let's go back to what governor romney indicated, under his plan he would be able to cover people with preexisting conditions. well, actually, governor, that isn't what your plan does. what your plan does is to duplicate what's already the law, which says if you are out of health insurance for three months, then you can end up getting continuous coverage, and insurance company can't deny you if it has been under 90 days. but that's already the law. and that doesn't help the millions of people out there with preexisting conditions. there is a reason why governor romney set up the plan that he did in massachusetts. it wasn't a government takeover of health care, it was the largest expansion of private insurance, but what it does say

is that insurers, you have to take everybody. that also means you have more customers. but when governor romney says he'll replace it with something, but can't detail how it will be, in fact, replaced, and the reason he set up the system he did in massachusetts because there isn't a better way of dealing with the preexisting conditions problem, it reminds me, he says he will close deductions and loopholes for his tax plan. that's how it will be paid for, we don't know the details. he says that he's going to replace dodd-frank, wall street reform, but we don't know exactly which ones, he won't tell us. he now says he'll replace obama care and ensure all the good things in it will be in there and you don't have to worry, and at some point i think the american people have to ask themselves, is the reason that governor romney is keeping all these plans to replace secret

because they are too good? is it because that somehow middle class families will benefit too much from them? the reason is because when we reform wall street, when we tackle the problem of preexisting conditions, then, you know, these are tough problems and we have to make choices, and the choices we have made have been ones that are ultimately benefiting middle class families across the country. >> i have to respond to that. my experience as a governor, if i come in and lay down a piece of legislation and say it's my way or the highway, i don't get a lot done. the way tip o'neil and ronald reagan worked together. ronald reagan laid out the principles he was going to foster, lower tax rates, broaden the base, you said the same thing. simplify the tax code, broaden the base. those are my principles, i want

to bring down the tax burden on middle income families. i want to work with congress on bringing down deductions. we could have a single number, $25,000, $50,000, anybody can have deductions up to that amount. and then the deductions disappear after that you could follow bowles-simpson and do it deduction by deduction. we need to bring down rates, broaden the base, simplify the code and create incentives for growth. with regard to health care, you had remarkable details with regard to my preexisting condition plan. you studied up on my plan. i do deal with people with preexisting conditions, that's part of my health care plan. what we did in massachusetts is a model for the nation state by state. and i said that at that time. the federal government, taking over health care for the entire nation, and whisking aside the

tenth amendment which gives states the rights for these kinds of things is not the course for america to have a stronger, more vibrant economy. >> and that is a terrific segue to our next segment. and is the role of government. and let's see, role of government, and it is -- are yoe first on this, mr. president. the question, do you believe -- both of you, but you have the first two minutes, mr. president, do you believe there is a fundamental difference on the two of you on how you view the mission of the federal government? >> well, i definitely think there are differences. >> yeah. >> the first role of the federal government is to keep the american people safe. that's its most basic function and as commander in chief, that is something that i have worked on and thought about every single day i've been in the oval office. but i also believe that

government has the capacity, the federal government, has the capacity to help open up opportunity and create ladders of opportunity and to create framework where the american people request succeed. the genius of america is the free enterprise system and freedom, the fact that people can go out, start a business, work on an idea, make their own decisions, but as abraham lincoln understood, they there are also some things they do better together. in the middle of the civil war, abraham lincoln said let's help to finance the trancecontinental railroad. let's start the national academy of sciences, let's start land grant colleges. because we want to give these gateways of opportunity for all americans, because if all americans are getting opportunity, we're all going to be better off. that doesn't restrict people's freedom, it enhances it. and so what i've tried to do as

president is to apply those same principles. and when it comes to education, what i've said, we have to reform schools that are not working. we used something called race to the top. not a top-down approach, governor. we said to states, we'll give you more money if you initiate reforms, and as a consequence, had you 46 states around the country who have made a real difference. but what i've also said, let's hire another 100,000 math and science teachers to maintain our technological lead and people skilled and able to succeed. and hard pressed states right now can't all do that. we've seen layoffs of hundreds of thousands of teachers over the last few years, and governor romney doesn't think we need more teachers. i do. i think that is the kin of investment where the federal government can help. it can't do it all. but it can make a difference, and as a consequence, we'll have a better trained workforce and that will create jobs, because

companies want to locate in places where we have a skilled workforce. >> two minutes, governor. >> massachusetts, our schools are ranked number one in all 50 states. the key to great schools is great teachers. every school district, every state, should make that decision on their own. the role of government, look behind us. the constitution and declaration of independence. the role of government is to promote and protect the principles of those documents. first, life and liberty. we have a responsibility to protect the lives and liberties of our people. that means the military second to none. i don't believe in cutting our military. i believe in maintaining the strength of america's military. second, in that line that says we are endowed by our creator with our rights, i believe we must maintain our commitment to religious tolerance and freedom in this country. that statement says we are en w

endowed by our creator to pursue happiness as we choose. i interpret that to say those who are less fortunate are cared for by one another. we are a nation that believes we're children of the same god and we care for those with difficulties those who are elderly, and those who have challenges, we care for them. we look for discovery, innovation, all of these things desired out of the american heart to provide the pursuit of happiness for citizens, but we also believe in maintaining for individuals the right to pursue their dreams and not have-tto he government put in a trickle-down government approach, saying that it can do a better job than free people pursuing their dreams. and the proof of that is one of the six people in poverty, we have gone from 32 million on

food stamps to 47 million on food stamps, 57% of college graduates this year can't find work. we know that the path we're taking is not working, it's time for a new path. >> all right. let's go through some specifics in terms of how each of you view the role of government. education. does the federal government have a responsibility to improve the quality of public education in america? >> the primary responsibility for education is the state and local level, but the federal government can play an important role, and i agree with secretary arne duncan with ideas he put forward on race to the top. some of them, but not all of them. the federal government can get local and state schools to do a better job. my own view, i've added to that i happen to believe -- i want the kids getting federal dollars from i.d.e.a. or title 1, poor kids or low-income kids rather,

i want thept m to go to the sch of their choice. i think the funds should follow the child and let the parent and child decide where to send their student. >> how do you see the federal government's responsibility to improve the quality of public education in this country? >> as i indicated, it has a significant role to play. to our race to the top program, we've worked with democratic and republican governors to initiate major reforms, having an impact right now. >> do you think you have a difference of your views and governor romney about education? >> this is where budgets matter, because budgets reflect choices so when governor romney indicates that he wants to cut taxes, and potentially benefit folks like me and him and to pay for it, we have to initiate significant cuts in federal support for education, that

makes a difference. his running mate, congressman ryan, put forward a budget that reflects many of the principles that governor romney has talked about. not very detailed. this seems to be a trend. what it did do, if you extrapolated how much money we're talking about, you would look at cutting the education budget by up to 20%. when it comes to community colleges, we are seeing great work done out there all over the country, because we have the opportunity to train people for jobs that exist right now. one of the things i suspect governor romney and i agree on, getting businesses to work with community colleges to set up training programs. >> do you agree, governor? >> let me finish the point. >> going very well in my state, by the way. >> where they are partnering, designing training programs and people who are going through them, know there is a job waiting for them if they complete. that makes a big difference, but

that requires federal support. let me just say one final example, when it comes to making college affordable, whether it's two year or four year, one of the things i did as president, we were sending $60 million to banks or lenders to administer loans. we decided to take out the middleman. we have been able to provide more loans, keep lower interest rates on student loans and this is an example of where our priorities make a difference. governor romney, i genuinely believe cares about education, but when he tells a student that, you know, you should borrow money from your parents to go to college, you know, that indicates the degree to which, you know, there may not be as

much of a focus on the fact that folks like myself, folks like michelle, kids probably who attend the university of denver, just don't have that option and for us to be able to make sure they have that opportunity, they can walk through that door, it's vitally important, not just to the kids, how we'll grow the economy in the long term. >> we're running out of time. >> mr. president, you are entitled to your own airplane, your own house as president, but not to your own facts. i don't have any plan to cut education funding, and grant for people that go to college, i won't make cuts there the place where you put your money is a clear indication of where your heart is. you put $90 billion into green jobs. i'm in favor of green energy,

but many of these businesses have gone out of businessful half of them have gone out of businesses. a number of them were owned by people who were contributors to your campaign. the right course for america's government, we're talking about the role of government, is not to become the economic player picking winners and losers, telling people what kind of health treatment they can receive, taking the health care system over that has existing in this country for a long time, and produced the best health care records in the world. how do we make the private sector more efficient and effective. how do we get schools to be more effective? i say we grade them so parents can take their child to a school more successful. i don't want to cut our commitment to education. i want to make it more effective and sufficient. and by the way, i've had that experience. i don't just talk about it.

i've been there. massachusetts schools are ranked number one in the nation. not because i didn't have commitment to education, it's because i care about education for all of our kids. >> gentlemen, look -- excuse me, sir. we've barely got three minutes left. i'm not going to grade the two of you and say your answers have been too long or i've done a poor job. >> you've deny a great job, jim. >> well, the thing is, the role of government and governing, we've lost a pod in other words, we only have three minutes left in the debate before we go to your closing statements, and so i want to ask, finally here, and, remember, we've got three minutes total time here, and the question is this. many of the legislative functions of the federal government right now are in a state of paralysis as a result of partisan gridlock. if elected, re-elected what

would you do about that? >> i had the great experience, it didn't seem like it at the same, of being elected in a state where my legislature was 87% democrat. i had to get along and work across the aisle to get along. we drove our schools to be number one, we cut taxes 19 times. >> what would you do as president? >> i would sit down day one. actually the day i get elected, i'll sit down with leaders, republican and democrat, and sit down, talk about the issues and challenges in our state in that case. we have to work on a collaborative basis, not to compromise our principles, but because there is common ground, and the challenges america faces. the reason i'm in this race, there are people really hurting today in this country and we face this deficit could crush future generations. what's happening in the middle east, developments around the world that are of real concern

and republicans and democrats both love america, but we need leadership. leadership in washington that will bring people together and get the job done and could not care less if it's a republican or democrat. i've done it before i'll do it again. >> mr. president. >> first of all, governor romney is going to have a busy first day, he will also repeal obama care, which won't be popular with democrats as you are sitting down with them. look, my fill ophilosophy has b will take ideas from anyone as long as they make middle class families stronger. that's how we cut taxes for middle class families and small businesses. that's how we cut costs. that's how we signed three trade deals into law, helping to double exports and sell more american products around the world. how we repealed don't ask, don't

tell. how we ended the war in iraq and we'll wind down the war in afghanistan, we went after al qaeda and bin laden. we've seen progress even under republican control under the house of representatives. but ultimately, part of being principled, part of being a leader, is, a, describe exactly what it is you intend to do, not just saying i'll sit down, you have to have a plan. number two, what's important is occasionally you have to say no. to folks both in your own party and in the other party. and, you know, have we had fights between me and the republicans when they fought back against us, reining in the excesses of wall street? absolutely. that's a fight that needed to be had. when we were fighting over whether or not we would make sure if americans had more security with health insurance? we said that's a fight we needed to have. part of leadership and governing is both saying what it is that

you are for, but also being willing to stay no to some things, and i've got to tell you, governor romney when it comes to his own party during the course of this campaign, has not displays that willingness to say no to the more extreme parts of his party. >> that brings us to closing statement. there was a coin toss. governor romney, you won the toss, and you elected to go last. so you have a closing two minutes, mr. president. >> well, jim, i want to thank you, and i want to thank governor romney. i think this was a terrific debate, and i appreciate it. i want to thank the university of denver. you know, four years ago we were going through a major crisis. and yet my faith and confidence in the american future is undiminished, and the reason is because of its people. because of the woman i met in north carolina who decided at 55 to go back to school because she

wanted to inspire her daughter and has a job from that new training she has gotten. because of a company in minnesota willing to give up salaries and perks for executives to make sure they didn't layoff workers during a recession. at wo the auto workers you meet in toledo or detroit, that take pride in building the best cars in the world, not just because of the paycheck, but the sense of pride. the question, how do we build on those strengths? everything i'm trying to do, and proposing for the next four years, in terms of improving the education system, developing american energy, or closing loopholes for companies shipping jobs overseas and focusing on small businesses creating jobs in the united states. closing deficit in a responsible, balanced way that allows us to invest in our future. all those things designed to make sure that american people, their genius, their grit, their